Fitch downgrades eurozone banks ratings

Credit rating agency Fitch has warned of mass eurozone downgrades to sovereign debt ratings.Fitch downgrades eurozone banks ratingsThis has led to a very nervous start to trading after a collapse of 3% in Asian equities overnight and there is an uneasy feel to the markets as we move into today.

Yesterday another ratings agency Moody’s downgraded a number of Spanish banks which led to a run on banking shares-this weekend the G8 will meet to try to tackle a full blown crisis in Europe.

Pressure will come from president Obama and David Cameron to tackle the Eurozone problems which are weighing on global growth.

Dovish comments from MPC member Adam Posen that he may have been too optimistic on the UK economy have failed to rattle the pound.

However the sentiment does seem to be shifting back to more QE which may start to affect the pound in time.

Recently the Pound has benefitted from safe haven flows away from the euro and selling pressure in commodity currencies.

The G8 summit will from the focus over the weekend and the markets will be looking for a clear statement of intent and uniformity.

There is growing diversion within Europe recently heightened by Francois Hollande the French president sticking by his anti austerity pledge.

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